Intel’s Nvidia-Like Rally Faces a Reality Check: Should You Buy the Dip In INTC Stock?

While Nvidia’s (NVDA) price action is a case study for stocks going parabolic, the Jensen Huang-led company’s returns have been quite muted of late. Meanwhile, Intel (INTC), which was in the news not long ago for falling to multi-year lows, seems to have entered Nvidia’s orbit (sort of) and has been hitting multi-year highs.

After gaining 84% in 2025, the stock was up over 22% year-to-date (YTD) as of Friday's closing prices. However, as typical after such rallies, Intel faced a reality check following the Q4 2025 confessional yesterday and is down in the double digits. So, does it make sense to buy the dip in INTC stock today, beginning with a snapshot of the once-iconic chipmaker's Q4 earnings?

Intel Q4 2025 Earnings

Intel’s Q4 earnings were a mixed bag. It reported revenues of $13.7 billion, which were ahead of the $13.4 billion that analysts were modeling. While Intel's net losses widened to $591 million, compared to $126 million in the corresponding quarter last year, the adjusted earnings per share came in at $0.15, which was almost twice the $0.08 expected by analysts.

Meanwhile, Intel’s guidance spooked investors. The company expects to post revenues between $11.7 billion and $12.7 billion in the current quarter, whose midpoint was below Street estimates of $12.5 billion. Intel guided for a breakeven on adjusted earnings, which also fell short of the $0.05 that analysts were expecting.

The company attributed soft guidance to supply issues, which it expects to ease in the second quarter of the year. After the sharp rally – the stock was up nearly 109% over the 52-week period preceding the earnings – Intel needed a flawless report, the absence of which triggered the sell-off.

Meanwhile, thanks to the investments from Nvidia and Softbank (SFTBY), Mobileye (MBLY) stake monetization, and Altera stake sale to Silver Lake, Intel ended 2025 with cash and cash equivalents of $14.26 billion. While the capital raise and the U.S. government's conversion of its debt to equity have bloated Intel’s outstanding share count, it has helped fill its coffers with the much-needed cash.

Intel’s Turnaround Is Gaining Traction

Intel is still a pale shadow of its glorious past, where it was synonymous with chips, as Nvidia is with AI chips currently. But the company is working on a turnaround strategy. It has invested heavily in the foundry business.  While big-bang foundry partnership announcements have been conspicuous by their absence so far, there are expectations that the company should be able to sign up major customers in the back half of the year. Apple (AAPL) is among the companies that are rumored to be in talks with Intel.

Custom Application-Specific Integrated Circuit (ASIC) is another growth area for Intel, and the business is running at an annualized run rate of $1 billion, with the company estimating it to be a total addressable market (TAM) of $100 billion.

At the CES 2026, Intel unveiled its Panther Lake processors, which are built on its 18A process node and were well-received by the markets. There is also a growing recognition of the role that Central Processing Units (CPUs), which Intel makes, play in the AI ecosystem. The demand for AI PCs is another key driver for Intel stock.

Should You Buy the Dip in INTC Stock Today?

It’s a bit tricky to value Intel, whose shares would appear bloated at a forward price-to-earnings (P/E) multiple of 282x and a P/E-to-growth (PEG) multiple of 28.57x. However, Intel, which briefly fell below 1x its book value, now trades at roughly twice the book value.

The Intel story is more about the long-term revival in earnings. I believe the investing case for Intel revolves around CEO Lip-Bu Tan’s comments during the Q4 earnings call. He talked about the massive market opportunity for the company and said, “The breadth of our IP and know-how across silicon design, system level integration, wafer manufacturing and advanced packaging uniquely position us to capitalize on these AI-driven trends.” However, Tan admitted that Intel’s “execution needs to continue to improve.”

I would add that while Intel’s execution has improved, the company still needs to do a lot more on that front. Overall, while I won't panic sell INTC, I am not too inclined towards buying the dip in Intel stock today and believe that much of the expected growth and operational improvement is already baked into the prices.